Apprenticeship Levy – Part 3

Last Friday, the Government published their proposals for implementing the Apprenticeship Levy and the structure for funding Future Apprenticeships from May 2017.

They included a new set of incentives for employers to encourage them to get involved, updates to eligibility and the latest on funding available for non-levy employers.

What’s new since the last update

There will be 15 bands within the funding structure. Each framework or standard will be assigned to a funding band for the employer to negotiate a price with their chosen training provider. The upper limit within each band caps the amount of funding available for each apprenticeship.

The training provider MUST be on the Register of Apprenticeship Training Providers (RoATP)

There will now be a 20% completion incentive payment for all employers. This means that when an apprentice completes his/her learning and takes the end point assessment, regardless of whether they achieve, a completion payment of 20% of the funding will be paid.

Subjects within the STEM (Science, Technology, Engineering and Mathematics) priority areas will get an uplift of 40% for level 2 and 80% for level 3 to encourage take up of these areas.

Employers and training providers will receive an additional £1000 each to support a 16-18 year old apprentice, a care leaver or those that have a Local Authority EHC (Education and Health Care) plan.

The levy will be collected from 1st April 2017 for all employers with a payroll bill in excess of £3M. The first £15K of the levy will not be collected.

Non-levy employers will be required to pay 10% of the funding and will received 90% Government funding for their apprentices. Small employers of less than 50 employees, who employ a 16-18 year old apprentice, will receive 100% of Government funding.

Levy payers who have exhausted the funds available in their levy account will also be able to claim 90% Government funding for taking on further apprentices.

Apprentices will be eligible to be on a programme lower than the level of their highest qualification if there is significant new learning including graduates.

The new funding structure will be for all apprentice starts after 1st May 2017, regardless of whether the apprentice is following the old framework or the new standards. The new standards will be funding far more favourably than the old frameworks. Apprentice starts prior to 1st May will remain on the old funding structure

Employers who set up as a Training Provider to deliver their own apprenticeships will be subject to Ofsted inspection.

Robert Halfon, the newly appointed Apprenticeships and Skills Minister said today: “We need to make sure people of all ages and backgrounds have a chance to get on in life. Apprenticeships give young people – especially those from disadvantaged backgrounds – a ladder of ‎opportunity. That’s why we continue to work tirelessly to deliver the skills our country needs. The apprenticeship levy is absolutely crucial to this.

“Our businesses can only grow and compete on the world stage if they have the right people, with the right skills. The apprenticeship levy will help create millions of opportunities for individuals and employers. This will give our young people the chance they deserve in life and to build a highly-skilled future workforce that the UK needs.”

The consultation is open to 5th September. Follow this link for full details.